The Long Tail

A Post by Eric

  Chris Anderson, editor-in-chief of Wired Magazine wrote The Long Tail, The theory of the Long Tail is that our culture and economy is increasingly shifting away from a focus on a relatively small number of "hits" (mainstream products and markets) at the head of the demand curve and toward a huge number of niches in the tail. As the costs of production and distribution fall, especially online, there is now less need to lump products and consumers into one-size-fits-all containers. In an era without the constraints of physical shelf space and other bottlenecks of distribution, narrowly-targeted goods and services can be as economically attractive as mainstream fare.

Can we break from the typical Apartment Commodity by applying these theories? Most of the Long Tail aggregators, such as Netflix, Amazon and iTunes, completely dominate their categories. They are, in a sense, hits. But the Long Tail is about the shift from hits to niches. The Tail has a MUCH higher profit margin than the Head, and will allow you to charge higher rents and will increase your NOI significantly if you can pull it off. Those successful at this approach will get $200 to $300 more per month in rent than the Plain Jane across the street. Is your apartment community conducive to dominate the Gay and Lesbian Market, the Female Market, the Gen X Market, the Gen Y Market, the Baby Boomer Market, the Work Force Housing Market, the Pet Market, and on and on. Are you doing anything to attract and dominate any of these market slices? If you are, can you then create a Niche within a Niche, and further spread the gap between you, and anyone else, thus creating your own market as you Break from The Pack of Apartment Commodity.